Grace Ashiru
MTN Nigeria, the country’s largest telecommunications company, has applied for Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP) licenses for its fintech subsidiary, MoMo PSB, signaling an increased focus on digital payments within Nigeria.
The PSSP license will enable MoMo PSB to offer payment processing gateways, create financial solutions, and provide merchant aggregation and collection services. With this license, MTN can process its payments in-house, reducing its reliance on external PSSPs and minimizing associated costs. In addition to addressing MTN’s internal payment needs, MoMo PSB will also be equipped to handle payment processing requirements for merchants and partners.
The PTSP license, meanwhile, will allow MoMo PSB to deploy and service POS terminals, develop POS applications, and provide training and support to over 302,000 merchants, agents, and 5.3 million users on the MoMo PSB platform.
MTN’s recent licensing positions its fintech division as a direct competitor to established platforms like Interswitch and Flutterwave. In the Point-of-Sale (PoS) market, MoMo PSB will challenge key players such as Moniepoint, Opay, and Palmpay.
MTN’s other fintech subsidiary, Yello Digital Financial Services (YDFS), took the initiative to apply for these licenses, paying ₦200 million for them, as indicated in MTN’s Q3 2024 report. MTN Nigeria chose not to comment on the application process.
YDFS was launched in 2018 with a super-agent license, allowing it to facilitate bill payments and person-to-person money transfers. However, this license prevented YDFS from holding customer funds in digital wallets. In 2022, MTN introduced MoMo PSB, which operates under a Payment Service Bank (PSB) license, providing services such as airtime and data sales, bill payments, and money transfers. However, the PSB license restricts MoMo PSB from offering services like lending, foreign currency transactions, and insurance underwriting.
In Nigeria, obtaining a payment service provider license typically requires a ₦100,000 application fee, followed by a ₦100 million licensing fee upon final approval.
By the close of Q2 2024, MoMo PSB had recorded 5.5 million active digital wallets and maintained a network of 302,800 agents and merchants.
